Investing in Hawaii Buy and Hold for an OOS investor

[Shiv Jey]

Hello all!

I'm a buy and hold investor in various parts of the contiguous 48-states.  We vacation yearly in Hawaii and I'd like to get a property out there to help with some of the tax burden (still employed with a W-2).

I'm interested in investing anywhere in Hawaii that won't lose any money after mortgage payment and expenses. Does this exist in Hawaii? Normally I invest only if there's a safe 10% COC return but would accept less in Hawaii for the tax write-offs for vacationing yearly there. We can adjust our vacation to the island where the investment is in so I'm open to any island.

Thank you!

[Arla C. Meyer]

Hi, Shiv,

Like everywhere there are unique things to think about in Hawaii. I bought and renovated one duplex in Hilo, on the East side of the Big Island. It needed about 5 months' worth of work, but now it's cash-flowing. It took me a few years to find that property. Loads of termites, and single-wall construction.

So, there are properties to be found. On this island Hilo town is likely where you want to be...

South of here (Puna district) is just too full of colorful characters, not to mention lava potential.

Kona side of the Big Island is hard to cash-flow with long-term rentals because real estate is higher there.

One idea is to buy an existing airbnb property, and you can use it when you come on vacation.

The County of Hawaii has passed a law that disallows new short term rentals, but I'm pretty sure you can acquire one that's already up and running (as long as they've been paying their GE taxes).

Good luck,

Arla